Microsoft's Chinese Factory Inspection Could Prove Ineffective

Microsoft has promised to dispatch an investigative team to a Chinese factory allegedly engaged in workplace violations, with a full audit to be conducted the week of April 19. However, the National Labor Committee report that sparked Microsoft's action also documents how the KYE factory in Dongguan has a supposed history, according to its sources, of covering up violations such as the use of underage workers ahead of both government and corporate audits. That report also alleges that workers are coached on what to say to auditors before their arrival. Microsoft insists it has been monitoring workplace conditions at the factory on a regular basis.

Microsoft announced plans April 15 to investigate allegations of labor
violations at a Chinese factory building its products, in response to an April
13 report by the National Labor Committee. However, that same report suggests
the factory's management has a system for disguising potential violations
before audits, putting into doubt the efficacy of any investigation.
The National Labor Committee, a nonprofit nongovernmental organization (NGO)
that seeks to draw attention to labor and human rights abuses, documented
workplace abuses at the KYE factory in Dongguan City that range from excessive
working hours and harassment by security guards to restricted freedom of
movement and inability to use the bathroom during their shift. The report,
which quotes one unnamed worker as saying, "We are like prisoners," can be found here.

Microsoft insists that it has been auditing the situation at the KYE factory on
a regular basis, and that it has dispatched an investigative team to the
facility to review the veracity of the National Labor Committee's report.

"We should note that as part of Microsoft's ongoing supplier SEA
(Social and Environmental Accountability) program, an independent auditor has
been inspecting the KYE factory annually," Brian Tobey, corporate vice
president of manufacturing and operations for Microsoft's Entertainment &
Devices division, wrote in an April 15 posting on the Official
Microsoft Blog. "In addition, Microsoft personnel conduct quarterly
on-site assessments, and receive weekly reports from KYE on key labor and
safety criteria that we monitor as part of our supplier
SEA program."

Over the past two years, Tobey continued, "we have required
documentation and verification of worker age, and no incidence of child labor has
been detected. Worker overtime has been significantly reduced, and worker
compensation is in line with the Electronic Industry Citizenship Coalition
standards for the Dongguan area."
That runs contrary to the National Labor Committee report, which documents
substandard factory conditions extending back to at least 2007.
Tobey also stated that a "comprehensive on-site audit of the facility
will be conducted next week, with the specific goal of investigating the
allegations raised in the NLC report." Monitors will apparently be present
at the KYE factory until that investigation's conclusion.

Microsoft's Vendor Guidelines and Vendor Code of Conduct can
be found on this corporate site. The company's remedial measures for vendor
violations of the code apparently include retraining and termination of the
business relationship.
The question becomes whether such monitoring actually works. The National
Labor Committee's report devotes a chapter to government and corporate audits
of the KYE factory facility, describing how "someone in KYE management was
alerted with sufficient time to round up the hundreds of workers who were under
18 years old" ahead of a supposedly unannounced government visit.
Microsoft representatives who visited the factory, according to the report,
were "always ... accompanied by mid- and high-level managers. On these
walk-throughs, U.S.
company representatives hardly ever speak to the workers." Ahead of
corporate audits, workers are apparently coached about what to say with regard
to working conditions, dorms, meals and shift length.
Images accompanying the report were apparently smuggled out of the KYE
factory "over the last three years" and show makeshift dorms and
young workers passed out at their stations.
A Microsoft spokesperson declined to answer eWEEK's questions about why the
company's previous audits might have failed to reveal any workplace violations,
instead referring to Tobey's blog posting. If the National Labor Committee
report's description of KYE management's response to investigations holds true,
though, then the factory has ample time to prepare a response to an audit.
Other tech companies have experienced similar controversy over their Chinese
vendors within the past year. In a 2009 audit, Apple found 17 violations of its
Code of Conduct in a review of 102 facilities. Additionally, a
July 2009 engineer suicide at Foxconn, which manufactures the Apple iPhone
and iPod, raised an issue over workplace conditions there.

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.